Latest Country Partnership Strategy for Indonesia Focuses on Growth with Equity

WASHINGTON, December 11, 2012 - The World Bank Group’s Board of Directors today discussed the latest Joint Country Partnership Strategy (CPS) for Indonesia for the period 2013 -2014 that outlines the Bank Group’s role in sharing development solutions for an emerging Indonesia.

Bridging the final two years of President Susilo Bambang Yudhoyono’s administration, the new CPS is closely aligned with the government’s development objectives, updating the Bank Group’s engagement through a lens that -- like the country’s Masterplan for accelerated growth -- is pro-growth, pro-jobs, pro-poor, and pro-environment.

“Building on six decades of partnership with Indonesia, during which economic growth thrived beyond expectations and millions of people were lifted out of poverty, the World Bank Group pledges its continued support of Indonesia’s agenda of growth with equity,” said Stefan Koeberle, World Bank Country Director for Indonesia. “A strategy that focuses on tackling growth constraints across the archipelago and strengthening connectivity will bring jobs and educational opportunities to many more Indonesians.”

Many of the initiatives to promote equitable growth in the new CPS cut across sectors. For example, the Pro-Poor agenda will involve improving the national poverty targeting system, community-driven development programs, and health initiatives that help women and children. The Pro-Environment agenda includes programs that foster Green Growth and disaster preparedness. The Pro-Growth agenda focuses on initiatives that will improve connectivity, competitiveness, public financial management, financial sector regulation, investment in infrastructure, as well as the delivery of public services.

International Finance Corporation or IFC, the private sector arm of the World Bank Group, will support private sector development focusing on these priority areas.

A new Country Partnership Strategy will be formulated when the next presidential administration begins, in early 2015.

As with the previous CPS, the partnership with Indonesia focuses on engagement areas identified by the government as priorities and where the Bank Group can be most helpful in helping produce development results.

For example, with regard to decentralization, the CPS will focus on helping improve service delivery by local governments. Based on the government’s demand, this strategy will also support financial sector regulation and policy reforms for social insurance.

The Bank’s alignment with the government’s development agenda has encouraged other donors to offer third-party financing through various trust funds managed by the Bank.

“Aligning with Indonesia’s development priorities has enabled the Bank to facilitate similar support from and enhance collaboration with development partners. As a result, our engagements can provide deep and sustained implementation support, enabling us to build up evidence that can then reshape and improve the programs as needed,” explained Country Director Stefan Koeberle.

"The private sector is becoming the engine for sustainable economic growth. IFC provides long-term partnership, providing investments and advice for the private sector in enhancing financial inclusion for the poor, supporting micro, small and medium enterprises and women entrepreneurs, developing infrastructure, increasing rural incomes and reducing the impact of climate change," said Sarvesh Suri, IFC Indonesia country manager.

The new CPS was prepared in close collaboration with the Government of Indonesia, and involved consultations with representatives of various stakeholder groups, including academia, private sector, the media, civil society organizations, and development partners.

The World Bank’s strong presence in Jakarta runs a portfolio of 44 operations amounting to some USD $1.2 billion in commitments and USD $1.4 billion in trust funds commitments. IFC has a committed portfolio of US$1.2 billion and an innovative advisory services program totaling US$23-25 million of annual expenditure to support private sector development.